Durban – KwaZulu-Natal manufacturers are facing a tough time due to low demand brought about by a sluggish economy but the government is intervening by meeting with captains of industry in a bid to stem job losses.
KwaZulu-Natal Department of Economic Development, Tourism and Environmental affairs acting head of department, Siza Sibande told delegates at the KZN Manufacturing Indaba in Durban last week that it was important for the government to respond to the challenges facing businesses by reassessing its policies and the structure of the economy.
He said the province was also working on improving internet coverage to stimulate small business growth in townships.
“We are speaking at a very critical moment in the history of the country. We are trying to meet different captains of industry across the province to deal with issues with regard to the massive job loses we are currently experiencing,” Sibande said.
“It is unprecedented in the history of our country to have so many section 189 notices issued at the same time. It is very worrying and as government it is our responsibility to create a conducive environment for businesses to thrive and create opportunities. Manufacturing is a key and strategic sector which can create many jobs if it is well supported and managed,” he said.
He said KZN was strategically located to be a key manufacturing hub for the country because it is home to the two busiest ports of Durban and Richards Bay and has easy access to the Indian and Pacific Ocean, to Europe, Asia and South America.
He said businesses were currently not operating to capacity due to low demand and were struggling with challenges such as high fuel prices, electricity problems and high levels of social unrest because there was no shared ownership of the economy.
Sibande said the province was working on rolling out universal internet coverage by 2021.
“We need to ensure we roll out broadband within a very short space of time because without that the fourth industrial revolution will have no meaning to our people,” he said.
eThekwini Municipality, economic development deputy head Takalani Rathiyaya said manufacturing had the potential to turn the economy around and the city was working on projects in several sectors including clothing and textile, automotive, furniture and leather and footwear to stimulate growth.
“The manufacturing sector is responsible for employing skilled people in the workforce and currently accounts for 12% of GDP. Manufacturing employs 1.6 million people and is among the top three sectors in terms of export earnings and revenue generation for every rand invested,” he said.
However, Rathiyaya added that capacity was running at only 83,3% mainly due to a lack of demand for goods. “Manufacturing production has been adversely affected by frequent electricity outages, high input costs and weak domestic demand,” he said.
Trade and Investment KwaZulu-Natal chairperson Ina Cronje said all citizens, businesses and government departments, which had sometimes been guilty of opting for imported goods, could play a role to boost domestic demand by buying local.
“We can increase aggregate domestic demand. We are very quick to go for international brands and we don’t seem to take any pride in saying ‘this is proudly South African’.
“ We are not powerless as individuals. If those manufacturers that are under-producing below capacity can access lucrative international markets and keep the domestic market they will be able to up production,” she said.